Service marketing mix

Service Positioning
New Service Design & Development
Service Blueprinting
Service Process
Pricing of services
Services Distribution Management
Managing the Integrated Services
Communication Mix
Physical Evidence and Servicescape
Managing Service Personnel
Employee and Customer Role in Service
Delivery
 SERVICE POSITIONING
After a service strategy has been identified, a
company must decide how to position its product
most effectively. The concept of positioning
involves establishing a distinctive place in the
minds of target customers relative to competing
products.
In The New Positioning: The Latest on the World's 1
Business Strategy, Jack Trout distills the essence
of positioning into the following four principles:
 Essence Of Positioning Into The
Following Four Principles
A company must establish a position in the
minds of its targeted customers.
The position should be singular, providing one
simple and consistent message.
The position must set a company apart from
its competitors.
A company cannot be all things to all people it
must focus its efforts.
 Positioning and Marketing Strategy
Companies use positioning strategies to distinguish their
services from competitors and to design communications that
convey their desired position to customers and prospects in
the chosen market segments. There are a number of different
dimensions around which positioning strategies can be
developed. Marketers often use a combination of these
positioning approaches. Seven approaches to positioning
strategy are:
(1) using product characteristics or customer benefits,
(2) the price-quality approach,
(3) the use or applications approach,
(4) the product-user approach,
(5)the product-class approach,
(6) the cultural symbol approach, and
(7) the competitor approach
 Whatever strategy a firm chooses, the primary goal
is to differentiate itself from competitors by
emphasizing the distinctive advantages of its service
offerings.
 NEW SERVICE
DESIGN &
DEVELOPMENT
 SERVICE DESIGN SYSTEM
Service design process is comprised of service
system elements which form a blueprint to
communicate the service concept to
customers and employees
Service system elements can be categorized as
structural and managerial elements which
should be in place to offer services that
achieve strategic service vision as shown in
Figure 1
 Structural Elements
The decisions pertaining to structural elements are of
strategic in nature, which have to be planned
considering long-time horizon while designing service
delivery system. These structural elements are presented
below.
Delivery System
Front & back office operations
Automation like self-service technologies
Customer participation
Facility Design
Size of facility
Aesthetics and ambience
Layout and expansion consideration
Facility Location
Customer demographics
Single versus multiple sites
Site characteristics
Service concepts and objectives of service delivery
Capacity Planning
Managing waiting lines
Accommodating average and / or peak demand
Service line balancing
 Managerial Elements
Once structural elements are in place, service organization
take into account the activities require personal interaction
or virtual interaction with the customer as a service
encounter. It is important to consider managerial elements
while designing service which can improve customer
interaction and service quality at the same time provide
hassle free service with less waiting time.
Such elements are discussed below.
Service Encounter
Characteristics of service provider, employees & customer
 Quality
Reducing gaps between customer expectation and
perceptions
Managing capacity & demand
Information
 New Service Development
For their survival, service companies must develop new
services continuously. New service is defined as an offering
not previously available to the customers using Innovation
process
New service development process is required to
accommodate dynamic requirements of customers/ market,
to bring service innovations that achieve Competitive
advantage leveraging the speed of technological
developments
New service development process faces challenges in terms
that service cannot have extensive R & D departments like
manufacturing or processing industry? It is very difficult to
imitate or make prototype of new service and test it in some
laboratory.
 New Service Development (NSD) can be demonstrated as a
cycle shown in Figure 3.2, which takes service innovation
as inputs to the NSD cycle
 New Service Development: Innovation
Innovation can be defined as successful exploitation of
new ideas. Innovation is must to face the challenges
or competition in service due to
Low entry barriers in service
Few patent protection
Lower capital investments
Shorter service product cycles
Innovation can also be perceived as novel, useful and
creative ideas that improve effectiveness &
delivered to the customers to create commercial
value.
 Challenges in Service Innovation
Services are mainly thought of consumers of innovations (mostly
developed in manufacturing sector) and Imitators of or facilitators
to innovation of manufacturing firms
Difficulties in realizing innovation in services because
Services may or may not use specific resources in the form of R&D
departments like other goods
Service innovations may be are not result of deliberate activity at
all
Innovations are recognized only a posterior as they emerge in the
process of service provision on the basis of customers specific
needs
Service is both a product and a process and because of nature and
characteristics of services it is difficult to change or improve
service.
Service organization or employees may innovate while
providing good quality service or while meeting extra
ordinary clients request, but they may think that it is to
satisfy customer and never realized that they have actually
innovated something.
Classification of service innovation
Service innovation can be classified as radical innovation
and incremental innovation as shown in Figure 3.3.
 Drivers of Innovation
Financial pressures or increased competition to decrease
costs, increase efficiency
The changing economy
Stricter government regulations
Need for sustainable development
Shorter product life cycles
Community and social expectations and pressures
Demographic, social, and market changes
Rising customer expectations regarding service and
quality
Greater availability of potentially useful and
inexpensive new technologies
New ideas from customers, strategic partners, and
employees
 Radical Innovations
In radical innovation new service system with final service
product, technical and competence characteristics replaces
the old service system. It can visualize as step change in
some measure of growth like sales and efficiency. This
innovation can take following forms.
Major Innovation
New service for markets as yet undefined mostly driven by
information and computer based technology such as eBay
Start-up Business
New services in a market that is already served by existing
services such as make-my-trip, clear trip
New Services for the Market Presently Served
New service offerings to existing customers of an
organization such as ATMs at Airport
 Incremental Innovations
Incremental innovation results due to modest changes
in the existing services. It can take different forms.
Service Line Extensions Augmentation of existing
service line such as new menu items in some
restaurants
Service Improvements Changes in features of
currently offered service such as web based check-in
services offered by airlines
Style Changes Modest visible changes in
appearances such as changes in aesthetics
 Example: Service Innovation
Dell Computer Corporation offers same design of
computers (laptops) and utilizes similar manufacturing
systems as their competitors, but they differ
significantly in terms of how they serve their customers
needs both in terms of sales and after sales services.
Dells strategy of skipping the middleman (i.e., the sales
agent) and allowing customers to configure their
computers to their own requirements have kept Dell
apart from its competitors and helped build its
significant market share. At the same time Dell provides
online after sales service, where engineers can interact
with the customer and rectify the problems using
internet.
 New Service Development Cycle
After considering innovations as input to NSD cycle,
the cycle as shown in Figure 3.4 enters into planning
stage, which is comprised of
Design : Formulation of new services, objective /
strategy, Idea generation and screening and Concept
development and testing
Analysis: Business analysis and Project
authorization
After planning stage, cycle enters into execution
stage which is comprised of
 Development: Service design and testing, Process and
system design and testing, Marketing program design and
testing, Personnel training, Service testing and pilot run and
Test marketing
Full launch: Full-scale launch and Post-launch review
The steps involved in all the stages; design, analysis,
development and full launch are described in Figure 3.5,
3.6, 3.7 and 3.8 respectively
NSD CYCLE: DEVELOPMENT STAGE
NSD CYCLE: DESIGN STAGE
NSD CYCLE: DESIGN STAGE
NSD Cycle: Service Delivery System
Service delivery system is a very important component
while designing & delivery of new service as shown
in Figure 3.9. The elements of service delivery
system are
1. People: Organize people into cross-functional teams
2. Technology: Use appropriate tools and resources for
planning and execution
3. System: Develop organizational culture that
facilitate the entire service delivery process so that
products can be developed quickly and effectively.
 Service Delivery System Design: Service
Blueprinting
Service blueprinting is a technique to design service
delivery system as shown in figure 3.10.
A customer focused approach for service innovation
and service improvement
Helps in visualizing the service processes and hence
provide a birds-eye view of the service system
Identifying points of customer contact with service
system
Physical evidence associated with services from
customers perspective
BLUEPRINT - TESTING OF THE SERVICE
CONCEPT
 Connects the support processes throughout the
organization as shown in Figure 3.11.
In place of costly implementation of pilot studies,
blueprints allow the creation, study and testing of
services conceptually on a paper.
 Service Blueprint Advantages
In the service blueprint we can visually see the
activities which need direct customer contact and
which activities are back-office activities. This
information can be utilized to provide appropriate
training to employees and to develop good
communication skills.
Service blueprint can also enhance the quality and
efficiency. It gives a good scope to determine
potential areas where service failure may occur,
hence failure mode analysis can be performed.
Service Blueprint facilitates problem solving and
creative thinking and hence a good tool to innovate
in services.
 Considering quality issues right at the design stage
will help in avoiding quality losses or service failure
later.
It provides a service process structure which can
help in devising different approaches for service
system design appropriate for different types of
service organizations
Blueprint provides a common platform for all
stakeholders to participate in the process where
everybody gain insights into how their roles fit into
the integrated whole, which facilitate innovation.
Service Process
 Meaning
Process in services refers to the actual procedures,
mechanisms, and flow of activities by which the
service is delivered- the service delivery and
operating systems.
In fast food outlets the process comprises buying the
coupons at one counter and picking up the food
against that at another counter.
 Understanding Service Process
1.Variety in Process: Process variety has implications
on cost, complexity and flexibility of operations.
Runner- Standardized set of activities and allows
high
efficiency in operations. Example- Checking the bank
account, railway enquiry
Repeaters- More or less like runners except that they
tend to be little more complex and occur less
frequently. Example- Fast food restaurant.
Strangers- a non-standardized process.
2. Value Addition in Process
3. Task Allocation
 Strategic Position and Service Process
Steps and Sequences (Complexity) and Steps variability
(Divergence):
1. Low complexity and low divergence: simple short
structured processes like one product e.g.:- Mc donalds
standardized service.
2. High complexity high divergence: long multi-step
process with high employee discretion and judgment
e.g.:- chefs in premium hotel
3. Low complexity high divergence: short process but
high discretion but high discretion and customization
e.g. :- tutor services.
4. High complexity low divergence: long complicated
service process but limited standardized offering
standard e.g. :- hotel services
Education Services and Process
 Service Process Matrix
Based on degree of labour intensity and the degree of
customisation there are 4 types of services:
1. Service Factory: Capital intensive and
standardized services- Airlines, Hotels, Resorts.
2. Service Shop: Capital intensive and customised
services- Hospitals, Repair shops.
3. Mass Services: high labour intensive, and low
degree of interaction and customisation
Retailing, Wholesaling and Schools
4. Professional Services- labour intensive and
highly customised services- physicians, lawyers,
accountants.
PRICING OF SERVICES
 Why Pricing of Services is different?
Customer knowledge of service price a reference
price is a price point in memory for a good or a
service
High degree of variability often exists across
providers of services not every physician defines a
check up the same way
Providers are unwilling to estimate prices in
advance legal service providers; fundamental
reason being they do not know themselves what the
service will involve until the process of service
delivery unfolds
 Individual customer needs vary your haircut fro
the same stylist may cost you differently
Price invisibility particularly in financial services,
most customers know about only the rate of return
and not the costs they pay in form of fund and
insurance fees
 Role of Non-monetary Costs
Demand is not just a function of monetary price but is influenced
by other costs as well. Like:
Time cost since most services require direct participation of
the consumer and thus their real time
Search costs - the effort invested to identify and select among
services you desire since prices for services are rarely
displayed in shelves an each service establishment offers only
one brand of service (except brokers & agents)
Convenience costs like customers have to travel to the
service, if service hours do not coincide with customers
available time
Psychological costs fear of not understanding (education),
fear of rejection (bank loan), fear of results (surgery)
Price as an Indicator of Service Quality
Customers prefer cues like company reputation,
level of advertising to access the quality
In other situations when quality is hard to detect or
price varies a great deal within a class of services,
consumers may believe that price is the best
indicator of quality
In case of high risk services like medical treatment,
customer looks price as a surrogate for quality
Thus in addition to cover the cost and match
competitors price, prices must be set with care to
convey the appropriate service quality
Price as an Indicator of Service Quality
 APPROACHES TO PRICING SERVICES
COST BASED PRICING
COMPETITION BASED PRICING
DEMAND BASED PRICING
 Cost -Based Pricing
Price = Direct costs + Overhead costs + Profit
Margin
Challenges:
Costs are difficult to trace as cost based pricing
involves defining the units in which a service is
purchased
Thus services are sold in terms of input units (like
hours) rather units of measured output
Labour is more difficult to price than material
Used in industries in which cost can be estimated in
advance like, advertising, construction
 Competition-Based Pricing
Monitor competitors pricing strategy (especially if
service lacks differentiation like dry cleaning and its
an oligopoly like airline)
Challenges:
Small firms may charge too and not make margins
high enough to remain in business
Heterogeneity of services across and within
providers makes it difficult to compare
 Demand-Based Pricing
Relate price to value perceived by customer i.e.
prices are based on what customers will pay for the
services provided
Challenges:
Monetary price must be adjusted to reflected the
value of non-monetary costs
Information on service costs may be less available to
customers, making monetary price not as salient
indicator to quality
Services Distribution
Management
 Distribution Management
Overseeing the movement of service from supplier or
manufacturer to point of sale. Distribution management is
an overarching term that refers to numerous activities and
processes such as packaging, inventory, warehousing,
supply chain and logistics. Effectively managing the entire
distribution process is critical to financial success and
corporate longevity. The larger a corporation or the greater
the number of supply points a company has, the more it will
need to rely on automation to effectively manage the
distribution process.
The distribution function of marketing is comparable to the place
component of the marketing mix. DM focus on both getting the
goods from the producer to the consumer. A distribution
channel in marketing refers to the path or route through which
goods and services travel to get from the place of production or
manufacture to the final users. It also include transportation and
logistical considerations.
Business-to-business (B2B) distribution occurs between a producer
and industrial users of raw materials needed for the manufacture of
finished products. For example, a logging company needs a
distribution system to connect it with the lumber manufacturer who
makes wood for buildings and furniture.
Business-to-customer (B2C) distribution occurs between the
producer and the final user. For instance, the lumber manufacturer
sells lumber to the furniture maker, who then makes the furniture
and sells it to retail stores, who then sell it to the final customer.
 Distribution in a Services
In a services context, we often dont move physical
products
Experiences, performances, and solutions are not
being physically shipped and stored
More and more informational transactions are
conducted through electronic and not physical
channels
 Type Of Service Distribution
in marketing, goods can be distributed using two main types of channels: direct
distribution channels and indirect distribution channels.
Direct Distribution
A distribution system is said to be direct when the product or service leaves the
producer and goes directly to the customer with no middlemen involved.
This occurs, more often than not, with the sale of services. For example,
both the car wash and the barber utilize direct distribution because the
customer receives the service directly from the producer. This can also occur
with organizations that sell tangible goods, such as the jewellery
manufacturer who sells its products directly to the consumer.
Indirect Distribution
Indirect distribution occurs when there are middlemen or intermediaries within
the distribution channel. In the wood example, the intermediaries would be
the lumber manufacturer, the furniture maker, and the retailer. The larger the
number of intermediaries within the channel, the higher the price is likely to
be for the final customer. This is because of the value adding that occurs at
each step within the structure.
 Strategies for Building Distribution Channels for
Services Companies
1. List other products or services your customers use.
What problem are your customers trying to solve when they buy
from you? Are there complementary services or products that
come before or after they join you? What else may be on your
decision makers plate at the time they buy from you?
2. Find organizations who already have access to your
prospects.
Think broadly about
Media they consume (online content, podcasts, industry
publications, newspapers, etc.)
Services they subscribe to
Consultants or vendors they work with
Companies they buy from regularly
Organizations they belong to
Events they attend
INTEGRATED SERVICE
MARKETING
COMMUNICATION
 SERVICE MARKETING
COMMUNICATION
Service marketing communication is all about promoting
yourself and the service of your company. It has direct
impact on the communication gap, in Gap model of Service
marketing. Integrated Services Communications a strategy
that carefully integrates all external and internal
communication channels to present a consistent message to
customers. This means coordination across:
sales and service people
print
Internet
other forms of tangible communication including the
servicescape
 Provider GAP 4

CUSTOM
ER

COMPA
Service External
Communica
NY Delivery GAP tions to
4 Customers
Key Factors Leading to Provider Gap
4
 Best Practices for Closing the Communication
Gap (Gap 4)
Employing integrated services marketing
communication strategies around everything and
everyone that sends a message or signal.
Manage customer expectations effectively
throughout the experience.
Develop mechanisms for internal communication to
avoid over- promising and ensure successful
delivery.
 Role of Marketing communications

Position and differentiate the service

Helps Customers to evaluate Service Offerings
Promote the Contribution of the Service Personnel
Add Value through Communication Content
Facilitate Customer Involvement in Production
Stimulate or Dampen Demand to match Capacity
How is this done in services?
 COMMUNICATION MIX
The communication mix refers to specific methods used to
promote the company or its products to targeted customers.
Some depictions of the promotional mix include the following
elements:
1.Advertising
2.Personal selling
3.Discount promotions
4.Direct marketing
5.Public relations.
6.Sponsorship of events
These are the methods or a combination of any/all of these so as
to communicate and establish a relationship with the customer
either with the objective of marketing or for sales are referred
to as the Communication Mix for a business.
Communication mix
 EXPLANATION
Advertising - Any paid form of non personal presentation and
promotion of ideas, goods, or services by an identified sponsor.
Personal selling - Personal presentation by the firms sales force for
the purpose of making sales and building customer relationships.
Sales promotion - Short-term incentives to encourage the purchase or
sale of a product or service.
Public relations - Building good relationships with the companys
various publics by obtaining favourable publicity, building up a good
"corporate image", and handling or heading off unfavourable rumors,
stories, and events.
Direct marketing - Direct communications with carefully targeted
individual consumers to obtain an immediate response and cultivate
lasting customer relationships.
 The four main tools for services
promotion in communication mix are
Advertising is defined as any form of paid communication or promotion
for product, service and idea. Advertisement is not only used by
companies but in many cases by museum, government and charitable
organizations. However, the treatment meted out to advertisement
defers from an organization to an organization. Advertising
development involves a decision across five Ms Mission, Money,
Message, Media and Measurement. Mission looks at setting objectives
for advertising. The objectives could be to inform, persuade, remind
or reinforce. Objective has to follow the marketing strategy set by the
company. Money or budget decision for advertising should look at
stage of product life cycle, market share and consumer base,
competition, advertising frequency and product sub-stitutability.
Messages development further is divided into four steps,
1. message generation
2. message evaluation and selection
3. message execution,
4. social responsibility review.
Once the message is decided the next step is finalizing the
media for delivering the message.
The choice of depends on reach of media, frequency of
transmission and potential impact on customer. Based
on this choice of media types are made from newspaper,
television, direct mail, radio, magazine and the internet.
After which timing of broadcast of the message is
essential as to grab attention of the target audience.
Checking on the effectiveness of communication is
essential to companys strategy. There are two types of
research communication effect research and sales effect
research.
Sales Promotion
Sales Promotion is an incentive tool used to drive up short term
sales. Promotion can be launched directed at consumer or
trade. The focus of advertising to create reason for purchase
the focus of promotion is to create an incentive to buy.
Consumer incentives could be samples, coupons, free trial and
demonstration. Trade incentive could be price off, free goods
and allowances. Sales force incentive could be convention,
trade shows, competition among sales people.
Sales promotion activity can have many objectives, for example
1. to grab attention of new customer,
2. reward the existing customer,
3. increase consumption of occasional users.
Sales promotion is usually targeted at the fence sitters
and brand switchers. Sales promotional activity for
the product is selected looking at the overall
marketing objective of the company. The final
selection of the consumer promotional tools needs to
consider target audience, budget, competitive
response and each tools purpose. Sales promotion
activity should under-go presentation before
implementation. Once the activity is launched it
should be controlled as to remain within the budget.
Evaluation program is a must after implementation
of the promotional scheme
Public Relations
Companies cannot survive in isolation they need to have a constant
interaction with customers, employees and different stakeholders.
This servicing of relation is done by the public relation office. The
major function of the public relation office is to handle press
releases, support product publicity, create and maintain the
corporate image, handle matters with lawmakers, guide
management with respect to public issues.
Companies are looking at ways to converge with functions of
marketing and public relation in marketing public relation. The
direct responsibility of marketing public relation (MPR) is to
support corporate and product branding activities.
MPR is an efficient tool in building awareness by generating stories
in media. Once the story is in circulation MPR can establish
credibility and create a sense of enigma among sales people as well
as dealers to boost enthusiasm. MPR is much more cost effective
tool than other promotional activities.
Direct Marketing
The communication establishes through a direct channel without
using any intermediaries is referred to as direct marketing.
Direct marketing can be used to deliver message or service.
Direct marketing has shown tremendous growth in recent
years. The internet has played major part in this growth story.
Direct marketing saves time, makes an experience personal
and pleasant. Direct marketing reduces cost for companies.
Face to face selling, direct mail, catalogue marketing,
telemarketing, TV and kiosks are media for direct marketing.
Advertisement, Promotional activity, Public relation and direct
marketing play an essential role in helping companies reaches
their marketing goals
 Developing Effective Communication
Program
Companies have to put effort in developing an effective
communication program. The development of the
communication program can be charted into eight steps.
1. The first step is identifying the target audience. The target
audiences are the existing customer or the potential new
customers. Target audience identification is essential for
further development and overall success of the
communication program. Once the audience is identified the
next part is assessing the present company or brand
perception within the target audience. Based on the results
from the audience analysis the message should address the
requirements.
2. The second step is to set specific objectives for the given
communication message. This objective could be to enhance
existing image, convey attribute, or encourage a consumer to
act. The objective can have a cognitive, affective or
behavioural response.
3.third step is the design of the message. The designing of the
message follows the objective of the message. The design of
the message has to address the following four points, content
of message, message structure, message format and message
source.
4.The fourth step is the selection of the communication channel.
The channel must be appropriate to carry the message to the
target audience. For pharmaceutical companies, their sales
people are the most effective channel in reaching the target
doctor audience, instead of placing billboards.
5. The fifth step is related with the financial estimates
of the whole expenditure. Companies need to decide
budget of sales promotional and other activities. The
common methods followed are an affordable
method, percentage of sales method, competitive
parity method, and objective-task methods.
6. The sixth step is the decision relate to the
communication mix. Companies have limited
budget, so they need balance expenditure among
advertising, sales promotion, public relation, sales
force and direct marketing. The relevant choice of
the communication mix is highly dependable on the
industry the company is operating.
7. The seventh step measuring results of the
communication process. It is very important for
companies to keenly follow the outcomes of the
communication process. The results could be increased
in sales, change in attitude or image of the brand.
8. The eight step is managing the integrated marketing
process. Companies cannot afford to continue one
medium approach to achieve desired communication
effect. Companies must integrate all the available tools
as to reach a wider audience and effectively
communicate about brand and products.
Marketing communication cannot be considered in
isolation. It is an integral part of any companies
overall growth process.
PHYSICAL EVIDENCE IN
SERVICESCAPE
 PHYSICAL EVIDENCE
Physical evidence is the environment in which the service is delivered
and where the firm and the customer interact and any tangible
commodities that facilitate performance or communication of the
service.
Physical evidence includes the servicescape, a term used to describe
the physical facility where the service is produced and/or delivered.
For example
Ambience and cleanliness of a cinema hall
Cafe near a college
Elegant decor of a shop to cater to upscale market
o Servicescape or Atmospherics creates mood, longing,
attraction or desire to visit / recommend service provider by
tangibalisation. It includes every tangible touch point i.e.
brochure, building, dress of the people, furniture, wall decor
etc
 PHYSICAL EVIDENCE IMPORTANCE
EXAMPLES
Service Design is of utmost importance as people
visit expensive restaurants to relish dishes otherwise
available in less costly eating houses because of better
ambience. Theme parks are developed based on
common cartoon figures, sameway Luxury buses /
better maintained buses are preferred over lousy staff to
traverse same distance
MANAGING THE FIRMS PHYSICAL
EVIDENCE
 PHYSICAL EVIDENCE
The elements of 'marketing mix' which customers can actually see or
experience when they use a service, and which contribute to the
perceived quality of the service, e.g. the physical evidence of a bank
could include the state of the branch premises, as well as the delivery
of the banking service itself.
THE ROLE OF PHYSICAL EVIDENCE
1. Packaging the Services
Conveys expectations
Physical evidence => quality cues => image development

Influences perceptions
Image development => reduces perceived risk => reduces

cognitive dissonance after the purchase

 THE ROLE OF PHYSICAL EVIDENCE
2. Facilitates the flow of the service delivery
process
Provides information
How am i to act?

Facilitates the ordering process

How does this work?

Manages consumers
Barriers separate different consumer groups or

help to isolate the technical core

3. Socializes employees and customers
Uniforms
Identify the firms personnel

Physical symbol that embodies the groups ideals and

attributes
Implies a coherent group structure

Facilitates perceptions of consistent performance

Assists in controlling deviant members

4. Provides a means for differentiation

well-dressed personnel are perceived as:
more intelligent

better workers

more interactive
 COMPONENTS OF THE PHYSICAL
ENVIRONMENT
1. Facility exterior
Exterior design
Signage
Parking
Landscaping
Surrounding environment
2. Facility interior
Interior design (warm colours)
Red
Love, courage, danger, fire, sinful, warmth, excitement, cheerfulness,

enthusiasm, and stop

Yellow
Sunlight, warmth, cowardice, openness, friendliness, glory, brightness

Orange
Sunlight, warmth, openness, friendliness, glory
 Interior design (cool colors)
Blue
Coolness, aloofness, fidelity, calmness, piety, masculine,

assurance, sadness
Green
Coolness, restful, peace, freshness, growth, softness,

richness, go
Violet
Coolness, retiring, dignity, rich

Interior design
Equipment
Layout
Grid vs. Free-flow
Temperature
3.Other tangible evidence
Business cards
Stationary
Billing statements
CP&L statement
Reports
Brochures
Employee performance
Employee appearance
Servicescape Other tangibles
1. Facility exterior Business cards
2. Exterior design Stationery
3.Signage Parking Billing statements
4. Landscape Reports
5.Surrounding Employee dress
environment Uniforms
Brochures
6. Facility interior
Web pages
7.Interior design Virtual servicescape
8. Equipment
9. Signage Layout
10.Air quality/temperature
 EXAMPLES OF PHYSICAL EVIDENCE FROM THE
CUSTOMERS POINT OF VIEW
Service Physical Evidence Other tangibles
Policy itself
Billing statements
Insurance Not applicable Periodic updates
Company brochure
Letters/cards
Building exterior
Parking Signs
Waiting areas Uniforms
Hospital Admissions office Reports/stationery
Patient care room Billing statements
Medical equipment
Recovery room
Airline gate area Tickets
Airline Airplane exterior Food
Airplane interior (dcor, seats, air quality) Uniforms
Packaging
Trucks
Express mail Not applicable
Uniforms
Computers
Parking, Seating, Restrooms Signs
Stadium exterior Tickets
Sporting event
Ticketing area, Concession Areas Program
Entrance, Playing Field Uniforms
 TYPES OF SERVICESCAPES
1. Servicescape Usage
Organizations differ in terms of whom the
Servicescape will actually affect by its design-
customers, employees or both?
Self Service
Remote Service
Interpersonal Services
2. Servicescape Complexity
Lean
Elaborate
 TYPOLOGY OF SERVICE ORGANIZATIONS BASED ON
VARIATIONS IN FORM AND USE OF THE SERVICESCAPE

Servicescape Elaborate Lean

usage
Self-service Golf course ATM
(customer only) eBay Car wash
Simple Internet services
Express mail drop-off

Interpersonal Hotel Dry cleaner

services Restaurant Retail cart
(both customer and Health clinic Hair salon
employee) Hospital
Bank
Airline
School
Remote service Telephone company Telephone mail-order desk
(employee only) Insurance company Automated voice messaging
Utility services
Many professional services
 ROLES OF THE SERVICESCAPE
Package
conveys expectations
influences perceptions
Facilitator
facilitates the flow of the service delivery process
provides information (how am I to act?)
facilitates the ordering process (how does this work?)

facilitates service delivery

Socializer
facilitates interaction between:
customers and employees
customers and fellow customers

Differentiator
sets provider apart from competition in the mind of the consumer
FRAMEWORK FOR UNDERSTANDING SERVICESCAPES, EFFECTS ON
BEHAVIOR
PHYSICAL INTERNAL
HOLISTIC BEHAVIOUR
ENVIRONMENTAL RESPONSES
ENVIRONMENT
DIMENSIONS
Cognitive
Emotional
Physiological Individual
Behaviours

Employee
Responses Social
Ambient Interactions
Conditions Perceived between and
Space/Function among customer
Servicescape and employees
Signs, Symbols,
and Artifacts
Customer
Responses
Individual
Behaviours
Cognitive
Emotional
Physiological
GUIDELINES FOR PHYSICAL EVIDENCE
STRATEGY
Recognize the strategic impact of physical evidence.

Blueprint the physical evidence of service.

Clarify strategic roles of the servicescape.

Assess and identify physical evidence opportunities.

Be prepared to update and modernize the evidence.

Work cross-functionally.
 PERSONNEL
MANAGEMENT
 What is Personnel Management ?
It is defined as obtaining, using and maintaining a
satisfied workforce.
It is the planning, organizing, compensation, integration and
maintenance of people for the purpose of contributing to
organizational, individual and societal goals.
It is that part which is primarily concerned with human
resource of organization.
 Elements of Personnel Management
Organization:- Organization is said to be the framework of
many activities taking place in view of goals available in a
concern. An organization can be called as a physical
framework of various interrelated activities.
Job:- The second element, i.e., jobs tell us the activities to be
performed in the organization. It is said that the goals of
an enterprise can be achieved only through the functional
department in it.
People:- The last and foremost element in personnel
management is people. In a organizational structure,
where the main aim is to achieve the goals, the presence
of manpower becomes vital.
 Personnel Manager
Personnel manager is the head of personnel
department.
He performs both managerial and operative
functions of management.
 Roles of a PersonnelManager
Personnel manager provides assistance to top management. The top
management are the people who decide and frame the primary
policies of the concern. All kinds of policies related to personnel or
workforce can be framed out effectively by the personnel manager.
He advices the line manager as a staff specialist. Personnel
manager acts like a staff advisor and assists the line managers
in dealing with various personnel matters.
 Roles of a PersonnelManager
As a counselor
Personnel manager attends problems and grievances of employees and guides
them. He tries to solve them in best of his capacity.

As a mediator
He is a linking pin between management and workers.
As a spokesman
Since he is in direct contact with the employees, he is required to act as
representative of organization in committees appointed by government. He
represents company in training programs.
 Personnel Management Functions
1. Manpower Planning:- is also called as Human Resource
Planning it consists of putting the right number of people, the
right kind of people at the right place, at the right time, doing
the right things for which they are suited for the achievement
of goals of the organization.
2. Recruitment:- there are 2 Types of Recruitment
a) Internal Recruitment
is a recruitment which takes place within the concern or
organization.
Internal sources of recruitment are readily available to an
organization. Internal recruitment sources are primarily :
Transfers
Promotions (through Internal Job Postings)
Re-employment of ex-employees
b) External Recruitment
External sources of recruitment have to be solicited from
outside the organization. Some external recruitment sources
are :
Advertisement
Employment Agencies
Educational Institutions
Recommendations
Labor Contractors
3) Employee Selection:- It is the process of putting right
men on the right job. It is a procedure of matching
organizational requirements with the skills and qualifications
of people. Effective selection can be done only when there is
effective matching. By selecting best candidate for the
required job, the organization will get quality performance
of employees.
 Employee Selection Process
Preliminary Interview
It is used to eliminate those candidates who do not meet the
minimum eligibility criteria laid down by the organization.
Written Tests
Various written tests conducted during selection procedure are
aptitude test, intelligence test, reasoning test, personality test, etc.
These tests are used to objectively assess the potential candidate.
Employment Interviews
It is a one to one interaction between the interviewer and the
potential candidate. It is used to find whether the candidate is best
suited for the required job or not.
Medical examination
Medical tests are conducted to ensure physical fitness of the
potential employee. It will decrease chances of employee
absenteeism.
 Appointment Letter
A reference check is made about the candidate selected and then
finally he is appointed by giving a formal appointment letter

.
 4. Training
Training is the process of enhancing the skills, capabilities and
knowledge of employees for doing a particular job.
Training process molds the thinking of employees and leads to
quality performance of employees. It is continuous and never
ending in nature.

Benefits ofTraining

Improves morale of employees

Training helps the employee to get job security and job
satisfaction. The more satisfied the employee is and the
greater is his morale, the more he will contribute to
organizational success and the lesser will be employee
absenteeism and turnover.
 Benefits of Training
Less Supervision
A well trained employee will be well acquainted with the
.
job and will need less of supervision. Thus, there will be
less wastage of time and efforts.
Fewer Accidents
Errors are likely to occur if the employees lack knowledge
and skills required for doing a particular job. The more
trained an employee is, the less are the chances of
committing accidents in job and the more proficient the
employee becomes
Chances of promotion
Employees acquire skills and efficiency during training.
They become more eligible for promotion. They become
an asset for the organization.
 Benefits of Training
Increased productivity
Training improves efficiency and productivity of employees.
Well trained employees show both quantity and quality
performance. There is less wastage of time, money and
resources if employees are properly trained.
 Methods of Training
On The Job Training
On the job training methods are those which are given to
the employees within the everyday working of a concern.
The motto of such training is learning by doing.
Off The Job Training
Off the job training methods are those in which training is
provided away from the actual working condition. Off the
job training is also called as vestibule training, i.e., the
employees are trained in a separate area( may be a hall,
entrance, reception area, etc. known as a vestibule) where
the actual working conditions are duplicated.
 Employee Relations
Employee relations generally deal with avoiding
and resolving issues concerning individuals
which might arise out of or influence the work
scenario.
Healthy employee relations lead to more
efficient, motivated and productive employees
which further lead to increase in sales level.
 Employee Relations
Employee Indiscipline :- It is when the employees do not
behave as per the accepted norms of behavior. Absenteeism,
change in employees behavior, slow performance and
grievances are all forms of employee indiscipline.
Employee Grievance:- The employees also expect from the
management to provide them a safe working environment,
fair treatment, proper incentives, participation in decisions,
and needs satisfaction. The failure on part of management
to meet these expectations is termed as employee grievance.
Employee Stress :- It is when the employees fail to meet
their own expectations whether in terms of personal goals,
career goals, performance, self-respect, etc
 Improving Employee Relations
Employee has expectation of fair and just
treatment by the management. Thus, management
must treat all employees as individuals and must
treat them in a fair manner. Employee favoritism
should be avoided.
Do not make the employees job monotonous. Keep it
interesting. Make it more challenging. This can be
done by assigning employees greater responsibilities
or indulging them in training programs.
Cont..
Maintain a continuous interaction with the employees. Keep
them updated about companys policies, procedures and
decisions.
Employees must be rewarded and appreciated for a well-
done job or for achieving/over-meeting their targets. This
will boost them and they will work together as a team
Encourage employee feedback. This feedback will make the
employers aware of the concerns of employees, and their
views about you as an employer.
Give the employees competitive salary. They should be fairly
paid for their talents, skills and competencies.
Be friendly but not over-friendly with the employees. Build a
good rapport with the employee. The employee should feel
comfortable with the manager/supervisor rather than feeling
 Supervising Working Conditionsto Maintain and
Effectively Utilize Personnel
Working conditions refers to the working environment and to
the non-pay aspects of an employees terms and conditions
of employment.
It covers such matters as the organization of work and work
activities; training, skills and employability; health, safety and
well- being.
 Various Services and Benefits to Workers
Health Services or Programs
Physical Examination
Employee Services
According to the Employee Services
Management Association, employee services
encompass "recreation programs, community
services, recognition programs, event
planning, childcare/eldercare services, convenience
services, and travel offerings."
 Maintaining Personnel Records& Personnel
Research
Personnel Records are records pertaining to
employees of an organization. These records are
accumulated, factual and comprehensive information
related to concern records and detained.

Such records are helpful to a manager in various

decision - making areas.
 Types of PersonnelRecord
1. Records of employment contain applicants past records,
list sources, employees progress, medical reports, etc.
2. Wages and salaries records contains pay roll records, methods
of wages and salaries, leave records, turnover records and
other benefit records.
3. Training and development contains appraisal reports, transfer
cases, training schedule, training methods.
4. Health and safety records include sickness reports, safety
provisions, medical history, insurance reports, etc.
5. Service Records are the essential records containing bio-
data, residential and family information, academic
qualifications, marital status, past address and employment
records.
 Purposes of PersonnelRecords
It helps to supply crucial information to managers regarding
the employees.
To keep an update record of leaves, lockouts, transfers,
turnover, etc. of the employees.
It helps the managers in framing various training and
development programs on the basis of present scenario.
It helps the government organizations to gather data in
respect to rate of turnover, rate of absenteeism and other
personnel matters.
It helps the managers to make salary revisions, allowances and
other benefits related to salaries.
It also helps the researchers to carry in- depth study with
respect to industrial relations and goodwill of the firm in the
market.
Role of Employee and Customer in
Delivery services in services
marketing
 Employee role in services
marketing

Critical Importance of Service Employees

Boundary Spanning Roles

Human Resource Strategies for Closing Gap 3

Service Culture
 The Critical Importance of Service
Employees
They are the service

They are the organization in the customers eyes

They are the brand

They are marketer

 The Services Marketing Triangle
COMPANY

Internal Marketing External Marketing

Enabling the promise Making the promise

EMPLOYEES Interactive Marketing CUSTOMER

Delivering the promise
 Employee satisfaction, customer
satisfaction, and profit
Satisfied employees make for satisfied customers(and satisfied customers can, in
turn, reinforce, employees sense of satisfaction in their jobs.)

The effect of employee behaviors on service quality

dimension
Boundary Spanners Interact with Both
Internal and External Constituents
External Environment

Internal Environment
 Source of conflict

Person versus role

Organization versus client

Client versus client

Strategies for Delivering Service Quality through
People
Hire the Right People
Compete for the Best People
Hire for Service Competencies and Service Inclination
Be the Preferred Employer

Develop People to Deliver Service Quality

Train for Technical and Interactive Skills
Empower Employees
Promote Teamwork

Provide Needed support systems

Measure Internal Service Quality
Provide Supportive Technology and Equipment
Develop Service-Oriented Internal Processes

Retain the best People

Include Employees in the Companys
Vision
Treat Employees as Customers
Measure and Reward Strong Service
Performers
Human Resource Strategies for Delivering
Service Quality through People

Hire for service

competencies and
service
Compete for inclination Be the
the best preferred
people employer

Measure and Train for

reward strong technical and
Hire the
service interactive
right people
performers skills

Develop
Treat Customer-
Retain the people to
employees as
best
Oriented Empower
deliver
customers Service employees
people service
Delivery quality

Include Provide
employees in needed support Promote
the companys systems teamwork
vision

Develop Measure
service-oriented Provide internal service
internal supportive quality
processes technology and
equipment
 Customers Roles in Service
Delivery

Importance of Customers in Service Delivery

CustomersRoles

Strategies for Enhancing Customer Participation

 Importance of Customer in
service delivery

Customer participation at some level is inevitable in

service delivery and co creation. Services are action
or performance, typically produced and consumed
simultaneously.
Levels of customer participation
across different service
 Customer Roles in Service
Delivery
Productive Resource

Contributors to service quality & satisfaction

Competitors
Strategies for Enhancing Customer
Participation

Effective
Customer
Participation
Delivering Service Through Intermediaries
and Electronic Channels

Service Distribution

Electronic Channels
Service Provider Participants
Direct Delivery of Service
creates the service concept
(like a manufacturer)

Delivery Through Intermediaries

entity that interacts with the customer in the execution
of the service
(like a distributor/wholesaler)
 Services Intermediaries
Franchisees
service outlets licensed by a principal to deliver a unique
service concept it has
created
e.g. INOX, McDonalds
Agents and Brokers
representatives who distribute and sell the services of
one or more service suppliers
e.g., travel agents, independent insurance agents
Electronic Channels
all forms of service provision through electronic means
e.g., ATMs
 Benefits and Challenges in Electronic
Distribution of Services
Benefits:
Consistent delivery for standardized services
Low cost
Customer convenience
Wide distribution
Quick customer feedback
Challenges:
Price competition
Inability to customize with highly standardized services
Lack of consistency due to customer involvement
Changes in consumer behavior
Security concerns
Competition from widening geographies